USD/CAD Breaks Higher as Oil Weakness Pressures Canadian Dollar

USD/CAD has entered a critical technical phase, advancing 0.8% to test the 1.4050 resistance level as declining crude oil prices weigh heavily on the commodity-linked Canadian dollar. WTI crude futures dropped 3.2% this week to $68.50/barrel, undermining CAD strength as energy exports constitute a significant portion of Canada's economy. The pair's upward momentum has accelerated after breaking above the 1.3950 psychological level, with technical indicators suggesting further upside potential. The RSI at 68 indicates strong momentum without yet reaching overbought conditions, while the 50-day moving average at 1.3875 now acts as solid support. Fundamental divergence between the resilient US economy and Canada's oil-dependent growth outlook continues to favor USD strength. Immediate resistance lies at 1.4100, with a breakthrough potentially opening the path to 1.4200. Traders should monitor crude oil prices closely, as any recovery could trigger profit-taking in USD/CAD longs.